The Office for National Statistics (ONS) has today published a collection of articles setting out further details of the changes to the way the UK economy will be measured from September 2014, and their expected impact.
The new methodologies reflect significant improvements. Some of these are embodied in the new international standards adopted by all European Union Member States. Other changes are designed to ensure that ONS continues to provide the best possible framework for analysing the economy and comparing it with those of other countries. They will be backdated to ensure consistency across different years.
On 16th May 2014, ONS published an article describing the full set of methodological and other improvements which will be implemented in this year’s Blue and Pink Books. It said that ONS would publish further articles, topic by topic, about these prospective changes before publication of the accounts themselves at the end of September.
The latest estimate of the total impact of all the improvements planned for September 2014 shows an increase in the level of GDP in current prices in 2009 of between 4 and 5%. The changes announced today are provisionally estimated to account for around half of this increase (around £33bn, or 2.3%). The impact of the changes on real GDP growth is still being calculated.
The major changes covered in the latest articles are listed below:
• The process of calculating and deflating Gross Fixed Capital Formation, including Business Investment, will be revised. This is likely to reduce GDP by £5bn in 2009.
• The methodology for measuring stock building by UK companies will be improved. This would reduce the level of GDP in 2009 by approximately £5bn.
• Inclusion in the National Accounts of certain illegal activities, such as prostitution and drug importation, manufacture and consumption; some of which are not prohibited in certain EU countries and for which comparable figures are now required. The new estimates would add approximately £10bn to the level of GDP in 2009.
• A new method for measuring Non Profit Institutions Serving Households – such as charities – will also be introduced. It is likely to add £24bn to the level of GDP in 2009.
• The way the gap between interest paid to and received from banks, known as FISIM, is measured will be modified. It is likely this would add £5bn to the level of GDP in 2009.
• Changes to the way Own-account construction, such as people building their own houses, is recorded are likely to add £4bn to the level of GDP in 2009.
Various other smaller changes are also being detailed, which are likely to have minimal impacts on the level of GDP.
Commenting on the improvements, ONS Chief Economic Adviser Joe Grice said:
“As economies develop and evolve, so do the statistics we use to measure them. These improvements are going on across the world and we are working with our partners in Europe and the wider world on the same agenda. Here in the UK these reforms will help ONS to continue delivering the best possible economic statistics to inform key decisions in government and business.”
National Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference.
© Crown copyright 2014.
Issued by: Office for National Statistics, Government Buildings, Cardiff Road, Newport NP10 8XG
Tel Media Relations Office 0845 6041858
Emergency on-call 07867 906553
Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: email@example.com